Following Allstream rejection, Sawiris ‘finished with Canada’ … again

In this Sept. 12, 2005 file photo, Egyptian telecom magnate Naguib Sawiris attends a news conference in Rome when he became the new chairman of Italian telecommunication company Wind SpA. AP Photo/Sandro Pace

Egyptian billionaire Naguib Sawiris has vowed never to invest in Canada again after Ottawa killed his $520-million offer for telecom company Allstream over national security concerns.

Sawiris told Egyptian website Ahram Online that he wouldn’t invest “even a single penny” in Canada after the surprising rejection, which he said was “totally a farce.”

“I am finished with Canada, I tell you,” he told the website Monday.

Sawiris’ comments mirror ones he made in 2011 after a messy regulatory battle with Ottawa that almost stopped him from investing in Wind Mobile, which launched in 2009 with Sawiris’ help.

During that time, he lambasted Canada for having a cumbersome, protectionist telecom regime. He said dealing with Canadian regulators was a “nightmare” and said he would never recommend investing in the country.

Throughout the candid, lengthy interview with Ahram, Sawiris – whose telecom investment fund Accelero Capital made a bid for MTS Allstream in May – marvelled at how the deal could have been rejected on national security grounds and expressed anger over never being told by the government there was a problem until the rejection.

“They don’t have anything specific to say,” Sawiris said, adding that the government was “very worried we could sue them” over the blanket rejection that came without warning.

“The Cairo administration should send a letter to Canada to ask why an Egyptian guy is a threat to Canadian national security,” Sawiris said. “I want to know.”

In a note on the rejection, Industry Minister James Moore alluded to Allstream’s IT contracts with the federal government as a key concern.

“It’s totally unacceptable to have foreign investors waste their time and money, hold their capital captive, and then come up with a comment like that,” said Sawiris about Moore’s reasoning.

In the 136 days since the transaction was announced, Sawiris, Allstream executives and lobbyists all say they were never told there could be any problems with the deal, but gave Ottawa “mitigation” plans anyway, including ones that dealt with the government contracts, to allay concerns.

Media reports following the rejection also suggest Ottawa worried that Accelero would use equipment from Chinese manufacturer Huawei Technologies, which has been linked with Chinese intelligence agents.

“We were buying a fibre optic telecommunications network that was already built by AT&T,” Sawiris told Ahram Online. “There were no Chinese at work. And if it was the case that it wasn’t allowed to buy from the Chinese, [the government] should have informed us.”

“We had been totally pre-clered,” he said.

Sawiris told the website that Ottawa may have also been concerned about his ties to North Korea, where a firm Sawiris chairs — Orascom Telecom — has a majority stake in the country’s only wireless provider.

But Sawiris said the threat was non existent because his links to North Korea root back to before his was given the green light to start Wind in 2011.

“There is nothing new,” Sawiris, who the website described as “weary and defiant,” said. “Where does the national security threat come from now?”

“Maybe they thought there was a link between North Korea and Egypt, and that Egypt was sending agents to spy on Canada” on behalf of North Korea, “like a James Bond movie,” said Sawiris.

“That’s their level of sophistication,” he said about the Canadian government. “With Canada, it’s a joke.”

While Ottawa will not say exactly how Allstream’s government contracts are a national security threat or whether other issues played a role in the rejection, speculation has grown to include the 2005 fraud related conviction of Khaled Bichara, one of Accelero’s top executives, as well as Sawiris disdain for Canadian regulators in the past.